Holiday costs forcing businesses to close their doors

More businesses are reportedly shutting on public holidays, including this past Australia Day long weekend, because of the high cost of penalty rates, leaving tourists with a bad impression of Australia.

Restaurant and Catering Association chief executive John Hart said more than half of businesses in NSW, Victoria, ACT and South Australia closed on public holidays because of costly penalty rates.

In Queensland, closures were higher, with up to two-thirds of shops shutting their doors.

The association is awaiting the outcome of an appeal to a decision of the Fair Work Commission in March last year against cutting penalty rates for retail and fast-food workers.

Meanwhile Tourism and Transport Forum chief executive
Ken Morrison
said penalty rates were having a huge impact on tourism that could begin to show in the nation’s visitor statistics.

“It relies on having higher service levels and being able to structure your business to have staff when customers want and need them," Mr Morrison said.

“There are plenty of businesses closed in Melbourne because of the penalty rates regime at a time when people are flocking to the city for the tennis," Mr Morrison said.

“They are going away with a negative perception of Australia and the reality is if we had a different regime, more businesses would be able to offer more employment for more people."

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Mr Hart said the rate of closures in Queensland was worse because of the introduction of penalty rates for casual workers on weekends or public holidays in 2010, when the state referred its industrial relations powers for the ­private sector to the Commonwealth.

4000 jobs lost nationally

And the association’s economic modelling showed up to 4000 jobs and millions of dollars in trade were lost nationally because weekend penalty rates had led to businesses cutting back opening hours.

“Businesses also can’t scale up their work force," he said. “If you have a work force that can’t work Sundays and public holidays, then you’re far less likely to have a more permanent work force than you otherwise would, you’re contributing to casualisation of the work force."

The Queensland government is still reviewing public submissions on whether it should maintain or terminate the referral, following the release of an issues paper almost a year ago.

In Sydney, restaurants including Wild Fire, Momofuku Seiobo, Tetsuya’s and Aria, were closed on the Monday public holiday while Marque Restaurant and Sephia were also not taking online bookings.

In Canberra, Aubergine was closed as well as The Artisan and The Boat House by the lake.

“We need to appreciate the difference of industries like ours that have to work around the clock, seven days a week," Mr Hart said.

“The current conditions mitigate our ability to do that."

Penalty rate provisions in the modern award legislation apply to all states and territories ,except to some sole traders and partnerships in Western Australia, the only state that did not refer its industrial relations powers to the Commonwealth.

But ACTU president
Ged Kearney
said employers would continue to try to go after penalty rates to erode the wages and conditions for workers.

“Penalty rates are important compensation for unsociable hours and make up a vital part of people’s incomes.

“These sorts of attacks highlight the importance of the additional protections for penalty rates that unions fought to have included in the Fair Work Act in 2013," she said.

“These provisions represent an additional legal hurdle for any employer that tries to attack penalty rates."